tag:blogger.com,1999:blog-8515247115132134144.post8341600516497236463..comments2024-02-17T12:34:01.400-08:00Comments on Illusion of Prosperity: The Unsustainable ChannelStagflationary Markhttp://www.blogger.com/profile/04568993350246477976noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-8515247115132134144.post-21138954514068784162012-09-28T14:30:26.256-07:002012-09-28T14:30:26.256-07:00Troy,
My thesis tells me if we ever try to square...Troy,<br /><br /><i>My thesis tells me if we ever try to square this picture, land values are going to take it in the pants, since the only thing that supports land valuation is disposable income.</i><br /><br />I have a similar thesis regarding the <a href="http://illusionofprosperity.blogspot.com/2012/09/the-cone-of-dividend-uncertainty.html" rel="nofollow">stock market</a>. Go figure.Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-29923065938771074002012-09-28T12:24:51.771-07:002012-09-28T12:24:51.771-07:00I used to mock Reagan's paid spokesman schtick...I used to mock Reagan's paid spokesman schtick slagging Medicare back in 1960 (Operation Coffee Cup)<br /><br />but Houston we have a problem:<br /><br /><a href="http://research.stlouisfed.org/fred2/graph/?g=baC" rel="nofollow">http://research.stlouisfed.org/fred2/graph/?g=baC</a><br /><br />from that graph the solution is obvious, we just need to transfer 2000's benefit burden to today and things would be in perfect balance.<br /><br />Medicare receipts are ~$200B. Expenses are $800B.<br /><br />The 40M baby boomers are aged ~50 to 66 now.<br /><br /><a href="http://research.stlouisfed.org/fred2/graph/?g=baG" rel="nofollow">http://research.stlouisfed.org/fred2/graph/?g=baG</a><br /><br />shows we need a 17% payroll tax just for medicare/medicaid.<br /><br />We could cut $400B from defense and raise corporate income taxes $400B, lose the Bush tax cuts and that would balance the primary deficit.<br /><br />But then we've got to face the SSA shortfall:<br /><br /><a href="http://research.stlouisfed.org/fred2/graph/?g=baI" rel="nofollow">http://research.stlouisfed.org/fred2/graph/?g=baI</a><br /><br />and thanks to ZIRP SSA is losing $100B/yr on lost interest income:<br /><br /><a href="http://www.ssa.gov/oact/progdata/newIssueRates.html" rel="nofollow">http://www.ssa.gov/oact/progdata/newIssueRates.html</a><br /><br />California pension system, same thing -- $20B in lost yield this past year.<br /><br />My thesis tells me if we ever try to square this picture, land values are going to take it in the pants, since the only thing that supports land valuation is disposable income.Troynoreply@blogger.com